Hungarian frequency

tender

Péter VáriDeputy director general

22. November 2016.

2

Efficient Awards and Efficient use of Spectrum

– main types of award currently used (auctions,

beauty contests, hybrids…)

– current trends and best practice in relation to

auctions

– promoting efficient use of spectrum and

meeting policy objectives (competition,

coverage etc.)

– suitability of current and future spectrum to

meet demand for mobile broadband

3

Design of the procedure

4

Main parameters of the concept

Independent but closely interconnected parameters of the concept of the award:

1. Object (technical parameters)

2. Timing

…………..2013...2014 (election) …2015...........

3. Fees (One-off fee)

0………..104,15…120…..130…..140………Mrd HUF

4. Period of the validity

9....10….11…12…13…14…15…..20…………….year

5. Legal Risk

0………………………………anybody can bring a lawsuit

6. Obligations (coverage, min data rate, quality, etc.)

5

Object

0. frequency band 800 MHz 900 MHz 1800 MHz 2100 MHz 2600 MHz

790–862 MHz 880-915 / 925-960 MHz

1710–1785 / 1805–1880 MHz

1900–1920 MHz 1920–1980 / 2110–2170 MHz

2500–2690 MHz

available spectrum (MHz)

121+60 (12 / 2 x 30)

70 (2 x 35)

150 (2 x 75)

202+120 (2 x 60)

190 (50 / 2x70)

EU regulation RSPP3

2010/ 267/ EU RSPP

2009/ 766/ EK RSPP

2009/ 766/ EK 2012/ 688/ EU

RSPP 2008/ 477/ EC

0. possible award spectrum (MHz)

60 (2 x 30)

70 (2x35)

30 150 20 120 190

1. the selection procedure

auction/ tender

2. base block size 5 MHz 5 MHz 5 MHz 5 MHz 5 MHz

3. territory country wide

4. usage electronic communications services

5. minimum data rate no regulation

6. time duration of licences

9-15 year harmonization to 800 MHz

7. secondary trading possible (full, partial)

8. technology technology neutral, WAPEX

BEM GSM, UMTS, LTE, WIMAX UMTS/ BEM4 BEM

1 RSPP: 72 MHz; CEPT report, RSC document: 60

2 20 MHz TDD 1900–1920 MHz the harmonization is underway (CEPT preparation)

3 243/ 2012/ EU

4 regulation modification underway

6

Objectives

6

to utilise spectrum assets in an efficient manner generating social welfare, considering social aspects to the greatest possible extent

enhance competition

foster, encourage and support the extension of broadband wireless coverage in Hungary;

foster, encourage and support to enhance broadband penetration in order to allow Hungary to meet the European Digital Agenda targets (100% minimum-speed broadband coverage, the entire European Union to be covered by broadband above 30 Mbps by 2020, 50 percent of European households to subscribe to broadband above100 Mbps by 2020).

support and foster the deployment of broadband internet coverage in rural areas currently lacking broadband and to ensure the access to it to the greatest extent possible

correlate to RSPP full utilisation of the 800 MHz, 900 MHz, 1800 MHz and 2600 MHz bands

to achieve sufficient state revenues from the sale of spectrum licences within the context of responsible management of national assets

7

Mobile bands

900MHz

1800 MHz

2100 MHz

15MHz FDD

2600 MHz

30.06.2014

07.10.2014

04.05.2016

5 years

5 years

5 years

40MHz TDD

70MHz FDD

04.11.1993 07.10.1999 22.12.2004

800 MHz 30 MHz FDD

2029

07.10.201404.11.2008 202904.05.

2016

22.12.2019

04.11.20082026

04.11.1993 07.10.1999 22.12.200422.12.2019

07.04.2022

07.04.2022

2026

5MHz TDD, 15MHz FDD

5MHz TDD, 15MHz FDD

5MHz TDD, 15MHz FDD 15MHz FDD (7.5 years)

15MHz FDD (7.5 years)

15MHz FDD (7.5 years)

5 years

(7.5 years)

(7.5 years)

(7.5 years)

5 MHz FDD

8 MHz FDD(15 years)

8 MHz FDD(15 years)

8 MHz FDD(15 years)

1.8MHz2MHz2MHz

08.10.1999

5 years

14.8MHz FDD (07.10.2014)

15MHz FDD (7.5 years)

15MHz FDD (7.5 years)

15 MHz FDD(15 years) 15MHz FDD (7.5 years)

15 MHz FDD(15 years)

15MHz FDD

07.10.1999

08.10.1999

15 MHz FDD(15 years)

15MHz FDD (7.5 years)

2x70MHzFDD

50MHzTDD

2034

2034

2x30MHzFDD

“Unassigned frequency up for award” before 2013 – object of the 2014 tender

Possible extension

“Unassigned frequency”

30.06.2014

8

470 MHz 790 -

900 MHz

Mobile frequency

bandsTV broadcasting band

(analogue and digital)

2100 MHz1800 MHz

862 MHz

2600 MHz

800 MHz

(band available for electronic

communications objectives in

harmonised way following the switch-off

of analogue TV broadcasting / the

retuning of digital stations)

- already in use

- up for sale

Technology

in specific

bands

Duplex

bandwidth

necessary for

service

provision

(min. / opt.)

5 / 10

MHz10 MHz 15 MHz

10 / 20

MHz15 MHz

- in bands below 1 GHz:

- in bands above 1 GHz:

Total bandwidth

proposed, optimally

available for service

provision

15 / 20 MHz

40 / 50 MHz

GSM,

UMTS(LTE)

GSM,

UMTS,

LTE

BEM

LTE

BEM

UMTS

(LTE)

BEM

LTE

For geographic coverage (nationwide) For increasing capacity (towns)

GSM: Voice

UMTS: Voice, data

LTE: Data

Mobile bands and technologies

9

900 MHz

880-880.1

925-925.1

914.9-915

959.9-960

880.1

925.1

885.1

930.1

886.9

931.9

887.9

932.9

897.9

942.9

905.9

950.9

914.9

959.9

T* M* * Vodafone Telenor (T) Magyar Telekom (M) *

880.1

925.1

885.1

930.1

889.9

934.9

894.9

939.9

899.9

944.9

904.9

949.9

909.9

954.9

914.9

959.9

880-880.1

925-925.1

914.9-915

959.9-960

* EGSM

basic blocks of 1 MHz

Licence not issued Assignment not restricted by any current licences

Guard band Used by previously issued licences

10

1800 MHz

1710-1710,1 1725,1 1740,1 1743,1 1758,1 1773,1 1784,9-1785 MHz 1805-1805,1 1820,1 1835,1 1838,1 1853,1 1868,1 1879,9-1880 MHz

Vodafone

T Magyar Telekom Telenor Telenor

1710 1715 1720 1725 1730 1735 1740 1745 1750 1755 1760 1765 1770 1775 1780 1785 MHz 1805 1810 1815 1820 1825 1830 1835 1840 1845 1850 1855 1860 1865 1870 1875 1880 MHz

Legend

Licence not issued Assignement not restricted by any current licences

Guard band Used by previously isued licences

11

Refarming and reshuffling (900, 1800 MHz)

• to eliminate the

fragmentation in both

bands => reshuffling

• to implement the new EU

directive => to introduce

the new technology (LTE)

=> refarming

• to minimalize the total cost of operators

• to minimalize the outage of operating networks

• to minimalize the transition period

1212

Impact of analogue Serbian TV stations (Chanel 61, 66)

Border area usage

13

BandObject

(MHz)A B C D E F G H I

800

MHz 6x2x5 2x2x5 2x2x5 2x2x5

900

MHz5x2x1 2x2x1 2x2x1 1x2x1

1800

MHz3x2x5 1x2x5 1x2x5 1x2x5

2600

MHz

14x2x5

8x56x2x5 4x2x5 5x5 TDD 4x2x5 3x5 TDD

26

GHz2x2x28 2x2x28

total 392 MHz 84 MHz 64 MHz22 MHz

25 TDD10 MHz 10 MHz 10 MHz 40 MHz 15 TDD 112 MHz

Spectrum packages

14

Roll-out obligation

• Geographic

• Population

60 month

• coverage of at least 96% of the population and at least 90% of national geographic coverage

10 year

• population coverage of at least 99%

The national coverage requirement can be met using

any of the frequency bands obtained.

The winning applicant can achieve coverage of at

least 15% of population the using any of the existing

frequencies.

Roll-out obligation

15

Objective: foster coverage at white areas

No excessive burden

Flexibility in network planning

Tender obligation and offer

Covering the white areas

16

Phase 1 (12 months)

Package C

• coverage across the municipal boundaries of localities listed in Appendix 1

Package A, B

• coverage within the municipal boundaries of 25 % of the localities listed in Appendixes 1 and 2 and specified by the licensee

• additional 25 % of localities listed in Appendixes 1 and 2 and specified by the licensee, coverage shall be ensured within 12 months following the shutdown of television broadcasting networks of neighbouring countries

44 localities with populations between 1,000 – 6,000 residents 44 localities with populations between 1,000 – 6,000 residents

Network roll-out scheduling - 800 MHz

44+70 localities with populations between 1,000 – 6,000 residents 44+70 localities with populations between 1,000 – 6,000 residents

17

Phase 2 (30/36 month)

Package A, B, C

• coverage within all localities with populations between 1,000-6,000 residents

Network roll-out scheduling - 800 MHz

18

Evaluation criteria and weighting

19

„A” – „B”

40 points

15 points15 points

15 ponits

15 points

Maximum 100 points

offered price

Number of localities with lessthan 1,000 inhabitants in thePhase 1 - 800 MHz

Number of localities with lessthan 1,000 inhabitants Phase 2 -800 MHz

Commitment to deploy nationalcoverage earlier than theprescribed deadlines - 800 MHz

The date of placing the 2600MHz frequency band into usenot letr then 4 years

20

„C”

40 points

20 points

20 points

20 points

Maximum 100 points

offered price

Number of localities withless than 1,000inhabitants in the Phase 1- 800 MHz

Number of localities withless than 1,000inhabitants Phase 2 - 800MHz

The date of placing the2600 MHz frequencyband into use not letrthen 4 years

21

Band

Outdoor Indoor

GSM

(RxLev)

UMTS

(RSCP)

LTE

(RSRP)

GSM

(RxLev)

UMTS

(RSCP)

LTE

(RSRP)

800 MHz - -96 dBm -110 dBm - -86 dBm -100 dBm

900 MHz -93 dBm -96 dBm -110 dBm -81 dBm -84 dBm -98 dBm

1800 MHz -93 dBm -96 dBm -110 dBm -73 dBm -76 dBm -90 dBm

2600 MHz - -96 dBm -110 dBm - -74 dBm -88 dBm

Remarks:

Signal levels were defined taking into account ETSI TR 102 581.

Abbreviations:

RxLev (Received Signal Level): reception level of the BCCH – Broadcast Channel;

RSCP (Received Signal Code Power): Pilot (reference) channel level measured after decoding;

RSRP (Reference Signal Received Power): Received performance of the reference carrier.

Deployment requirements

22

Roll-Out assessment

For purposes of assessing network roll-out, the Authority shall conduct

• path registration tests and stationarymeasurements on a randomised basis,

• checking parameters of network coverageand determining whether prescribed levelsare being met.

• the Authority shall enter all measurementsand pertaining statistical calculations in aprotocol

23

Results

24

Telekom

Offer (No) % of all localities

675 38,01%

90,71%

936 52,70%

Offers with 800 MHz

Covered localities below

1000 residences within 12

month

Covered localities below

1000 residences within

30/36 month

Vodafone

Offer (No) % of all localities

1100 61,94%

81,64%

350 19,71%

Telenor

Offer (No) % of all localities

350 19,71%

67,57%

850 47,86%

25

Downlink Uplink

790 MHz

791 MHz 821 MHz 832 MHz 862 MHz

Gu

ard

ban

d

Duplex gap

20,0 MHz; 33,3%

20,0 MHz; 33,3%

20,0 MHz; 33,3%

Obtained

TELEKOM

TELENOR

VODAFONE

800 MHz

Leasehold Leasehold

26

900 MHz

Vodafone M. TelekomTelenor

[MHz]

[MHz]

880,1

902,9

914,9

Vodafone M. TelekomTelenor

925,1

947,9

959,9

891,9

936,9

0.0 MHz

1.0 MHz

2.0 MHz

3.0 MHz

4.0 MHz 4.0 MHz

4.0 MHz

2.0 MHz

0.0 MHz

TELEKOM

TELENOR

VODAFONE

DIGI

24,0 MHz; 34,48%

23,6 MHz; 33,91%

22,0 MHz; 31,61%

After the tender

20,0 MHz;

33,56%19,6 MHz;

32,89%

20,0 MHz;

33,56%

Before the tender (2014)

27

Vodafone Digi Telekom Telenor

Vodafone Digi Telekom Telenor

[MHz]

[MHz]

1710,1

1725,1

1740

1755

1785

1805,1

1820,1

1835

1850

1880

30,0 MHz; 25%

60,0 MHz; 50%

30,0 MHz; 25%

0%Before the tender (2014)

0.0 MHz

5.0 MHz

10.0 MHz

15.0 MHz

20.0 MHz 20.0 MHz

0.0 MHz0.0 MHz

10.0 MHz

TELEKOM

TELENOR

VODAFONE

DIGI

50,0 MHz; 33%

60,0 MHz; 40%

30,0 MHz; 20%

10,0 MHz; 7%

After the tender

1800 MHz

28

TDD

2500 MHz 2570 MHz

2575 MHz

2615 MHz

2620 MHz

2690 MHz

14 x 5 MHz alapblokk 14 x 5 MHz alapblokkvé

dő

sá

v

8 x 5 MHz alapblokk vé

dő

sá

v

2600 MHz

60,0 MHz; 36%

40,0 MHz; 24%

65,0 MHz; 40%

Obtained

TELEKOM

TELENOR

VODAFONE

TDD

29

85,0 MHz; 30%

114,6 MHz; 40%

85,0 MHz; 30%

0% Before the tender

Used spectrum by MNO’s for MFCN

189,0 MHz; 34%

178,6 MHz; 33%

172,0 MHz; 31%

10,0 MHz; 2%

With the result of the tender

0.0 MHz

20.0 MHz

40.0 MHz

60.0 MHz

80.0 MHz

100.0 MHz

120.0 MHz104.0 MHz

64.0 MHz

87.0 MHz

10.0 MHz

Result

TELEKOM

TELENOR

VODAFONE

DIGI

30

Thank you for your

attention